Working with a Buyer’s Agent – Part 2
In Part 1 of this series we discussed the first step in working with a buyer’s agent, which focused on goal setting and the gathering of requirements. With a personalised plan in place, the next step concerns the property search.
This stage involves the buyer’s agent sourcing suitable investment properties through both on-market and off-market channels, focusing on the areas recommended in the first stage. A good buyer’s agent has a detailed understanding of what’s happening in different areas that could potentially impact on property values and will exploit this knowledge for the benefit of the investor.
The buyer’s agent will scan the market for suitable properties, making initial enquiries with real estate agents and visiting home opens, in order to find properties that both meet the criteria and are competitively priced. Buyer’s agents are property experts who keep up to date with price movements and so they can recognise when a property is competitively priced.
Most buyer’s agents will have established relationships with sales agents who will inform them about properties before they are launched to the market.
Depending on the type of property being sourced, a buyer’s agent may also attempt to identify property that may be purchased off market (i.e. not listed with a real estate agent). These off-market properties are purchased directly from vendors and can often be acquired at an excellent price as the seller isn’t paying a sales commission.
After some preliminary research, the buyer’s agent will form a short-list of suitable properties and present the investor with a key summary about each property. This summary will include an appraisal of the property using comparable sales data to determine its market value. The buyer’s agent may also provide information uncovered during initial investigations such as why the seller has decided to sell and the history of the property.
The investor will then review the information and select which of the properties are of interest. Some investors may choose to inspect the property before an offer is placed, others will leave everything to the buyer’s agent. The investor isn’t obligated to proceed and can instruct the buyer’s agent to continue with the search should no property be of interest.
Once there is a property of interest, the buyer’s agent will meet with the investor to discuss a ceiling price for the property and devise an optimum negotiation strategy that will ensure the property is acquired at the best possible price. Representing the best interests of the investor, the buyer’s agent will also look to secure the most favourable terms and conditions.
In Part 3 we’ll explain what happens when an offer is placed on a property.